Sports data supplier Sportradar is pulling out of the proposed merger with Horizon Acquisition Corp. II and is looking for a traditional initial public offering (IPO), Sportico reports based on people familiar with the matter.
Going Public via IPO
The $10 billion business combination between the Swiss-based sports data provider and the special purpose acquisition company (SPAC) led by the co-owner of Los Angeles Dodgers Tod Boehly was initially announced in March, when both parties signed a letter of intent.
Since then negotiations did not go as expected and in May, Sportradar and the SPAC reportedly agreed to extend the negotiation period to provide more time to thrash the details of the transaction that would take the global sports betting data supplier public.
Sportradar and Horizon extended negotiations in an attempt to secure private investment from institutional investors to sell equity prior to going public via a private investment in public equity (PIPE).
According to the latest report, Sportradar is backing out of the deal now and is exploring the more traditional approach to go public via an IPO.
The NFL Deal Impact
Another unnamed source cited by Sports Handle claims the reason for the latest development was the significantly lower than $10 billion total valuation of the combined entity, following the loss of the league data deal with the National Football League (NFL). The NFL chose Sportradar’s competitor Genius Sports instead, and signed a 4-year exclusive rights deal.
In a letter to sportsbook clients, Sportradar chief commercial officer Eduard Blonk explained that “the economics [behind the NFL deal] became irrational and would have required at least a five-fold increase in the fees charged to our customers for the same content and/or a level of loss-making on our part which simply did not make sense”.
Still reeling from the loss of the highly lucrative deal with the NFL, Sportradar went on a streak of partnership deals, to team up with the sports betting brand of Churchill Down Incorporated TwinSpires, deepen the partnership with NBC Sports Regional Networks and enter into ground-breaking deals with the New York Jets and Baltimore Ravens to help the NFL franchises maximize their sponsor performance and create new business opportunities for sponsor partners.
Though Sportradar remains an official provider of sports betting data for the National Hockey League (NHL), National Basketball Association (NBA), Major League Baseball (MLB), NASCAR, FIFA, and UEFA, the loss of the NFL undermined the valuation of the business ahead of the proposed combination with the SPAC and postponed Sportradar’s going public. At least for now.